Real estate terms

If you are involved in buying or selling real estate. Or, just for your general knowledge there are numerous terms, commonly used jargon, in the real estate industry.

Following are some basic terms related to the real estate industry:

CMA

Comparative Market Analysis. A CMA is a report that shows prices of properties that are comparable to a subject property and that were recently sold, are currently on the market or were on the market,
but not sold within the listing period.

MLS—Multiple Listing Service

An organization that collects, compiles, and distributes information about properties listed for sale by its members, who are real estate brokers. Membership isn’t open to the general public, although selected MLS data may be sold to real estate listing websites. MLS’s can be local or regional. There is no “one” MLS covering the entire nation.

PITI

Principal, interest, taxes and insurance. The sum of the principal and interest due on the buyer's mortgage, plus the property taxes and hazards insurance premiums for the property. PITI is usually stated as a monthly amount.

Down payment

A percentage of the home purchase price that the buyer pays in cash, instead of financing with borrowed money.

Contingency

Provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. One common example is a buyer’s contractual right to obtain a professional
home inspection before purchasing the home.

Closing Costs

The entire package of miscellaneous expenses paid by the buyer and seller when the transaction closes. These costs include the brokerage commission, mortgage-related fees, escrow or attorney’s charges, recording fees, title insurance, etc. Closing costs generally are paid through escrow.

Title Insurance

An insurance policy that protects a lender’s or owner’s interest in real property from assorted types of unexpected or fraudulent claims of ownership. It’s customary for the buyer to pay for the lender’s
title insurance policy.

Credit report

A summary of a person's track-record of repaying borrowed money, including credit cards, department store cards, mortgages, car and boat loans, personal credit lines, home equity loans and so on. A credit score is a numerical representation of a person's credit-worthiness. A credit report doesn't include personal lifestyle or medical information.

ARM

Adjustable-rate mortgage. Rather than having a fixed rate of interest for a 15- or 30-year term, an adjustable-rate mortgage has a fluctuating interest rate. Hybrid mortgages may be a combination of a fixed rate and an adjustable rate or have an initial fixed rate followed by an adjustment after five, seven or 10 years. ARMs and hybrids are more popular at times when interest rates are higher.

4B/2B

Shorthand notation for "four bedrooms and two bathrooms." A "bedroom" usually means a sleeping area with a window and a closet, but the definition varies in different places. A "full bathroom" is a room with a toilet, a sink and a bathtub. A "three-quarter bathroom" has a toilet, a sink and a shower, and a "half bathroom" has only a toilet and a sink.

Fixture

Anything of value that is permanently attached to or a part of real property. (Real estate is legally called "real property," while movables are called "personal property.") Examples of fixtures include installed wall-to-wall carpeting, light fixtures, window coverings, landscaping and so on. Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.